Renault-Geely: from the honeymoon to the future War of the Roses?

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The alliance concluded between the two groups, made official last summer, aims to form the world leader in the field of thermal and hybrid engines. However, this rapprochement between the French manufacturer and the Chinese Geely takes on particular significance after the failure of the IPO of Renault’s electric subsidiary Ampere.

Weakened by an alliance with Nissan with now overtones of cohabitation, the missed opportunity of the IPO of its subsidiary Ampere, and the subject of speculation surrounding a friendly merger with the Stellantis group, Renault is now trying to bounce back around the Horse subsidiary. The French manufacturer’s entity dedicated to thermal vehicles has just announced the signing of a partnership with the Dumarey group. It concerns the modernization of diesel engines with a view to the entry into force of the Euro 7 standard.

A necessary opening of capital
On the industrial level, Renault’s current strategy to stay in the electrification race involves opening up the capital of several of its activities to external partners. The merger with the Chinese Geely is part of this dynamic. It made it possible to create the new Horse entity whose headquarters and management team will be established in the United Kingdom.

The joint venture is jointly managed by Renault and the Chinese group, with a board of directors composed equally of representatives from each party. Once fully operational, this new company based in Madrid, Spain, for Horse, and Hangzhou Bay, China, for Geely, expects a turnover of fifteen billion euros. It aims to produce 5 million internal combustion, hybrid and plug-in hybrid transmissions and engines per year.

Geely at the heart of Renault’s future

But by sharing its most profitable historic thermal subsidiary, is Renault making a deal with the devil? At a time when European manufacturers fear competition from Chinese brands such as BYD and MG Motors, the merger exposes the French group directly to the ambitions of the Chinese manufacturer in Europe. Remember that Geely bought Volvo in 2010, before becoming the largest Chinese manufacturer with more than 2.3 million vehicles produced in 2022. Its constellation of 25 brands, starting with Zeekr and Lynk & Co, fuels its potential for conquest of the electricity market.

While certain French unions are talking about a divorce with Nissan, and are now denouncing a dismantling of Renault, one thing is certain: the role of Geely in the future of Renault now seems to be at the heart of the debates.

This article is originally published on .auto-infos.fr

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